WASHINGTON –U.S. Senate Committee on Small Business and Entrepreneurship Ranking Member Olympia J. Snowe (R-Maine) and Chair Mary Landrieu (D- Louisiana) today hailed unanimous Senate passage of bipartisan legislation to combat Federal contracting fraud.  Their initiative comes on the heels of several vulnerabilities and abuses in nearly all of the U.S. Small Business Administration’s (SBA) contracting programs, as identified in multiple reports by the nonpartisan Government Accountability Office (GAO).  The legislation would also extend the participation of approximately 3,400 companies in the Historically Underutilized Business (HUBZone) program for three years.  These firms would otherwise be excluded from the program beginning October 1^st based on new Census data.

“Exercising thorough oversight to ensure SBA’s contracting programs are efficient, effective, and accountable is a top priority,” Senator Snowe said.  “This legislation is a critical step towards ensuring all of our nation’s small businesses compete fairly in the federal market place, and I thank my colleagues for supporting it.  That said, our job is not done.  This bill must be signed into law before October 1^st to ensure that approximately 3,400 HUBZone firms do not lose their designation, and therefore their ability to remain competitive when it comes to accessing Federal contracts.  Given the state of the U.S. economy, it is imperative that these firms, which rely on Federal contracting as a vehicle to create jobs and economic growth, are given adequate time to prepare and plan for removal from the HUBZone program.  I urge our counterparts in the House to pass this legislation without further delay.”

“Our small businesses can’t afford to miss out on small business contracting opportunities because large businesses choose to abuse a system created to spur small business growth,” Senator Landrieu said.  “This piece of legislation will give the SBA and the Inspector General the necessary tools to combat fraud.  I urge my House colleagues to swiftly pass this legislation.  We must remove the barriers that are keeping America’s job creators from prospering.” 

“On another note, if we do not pass this bill, approximately 40% of HUBZone firms will be decertified come October 1^st of this year, including more than 100 HUBZone participants in my home state of Louisiana.  In these tough economic times, we can’t cut the cord to America’s small businesses, and government contracts are one of the easiest ways the federal government can boost the small business economy.  We must pass legislation that keeps small businesses’ doors open and provides entrepreneurs with consistency when it comes to rules and regulations.  With the passage of this legislation, the HUBZone program members would remain eligible for at least another three years giving them the lifeline they need in our current economic climate,” Senator Landrieu concluded.

Specifically, the Small Business Contracting Fraud Prevention Act (S. 633) would provide a comprehensive oversight framework within SBA to execute effective certification, surveillance and monitoring, and robust enforcement of its entire contracting portfolio.  The bill would also increase criminal penalties for businesses awarded contracts through fraudulent means.

Cosponsors of the bill include: Senators Scott P. Brown (R-Massachusetts), Michael B. Enzi (R-Wyoming), Jeff Merkley (D-Oregon), Kay Hagan (D- North Carolina), Claire McCaskill (D-Missouri), Chuck Grassley (R-Iowa), Kelly Ayotte (R-New Hampshire), Pat Toomey (R-Pennsylvania), Susan Collins (R-Maine), Joe Manchin (D-West Virginia), Maria Cantwell (D-Washington), and John Hoeven (R-North Dakota).